Blockchain to save shippers millions

A consortium comprising AB InBev, Accenture, APL, Kuehne + Nagel and a European customs organisation has successfully tested a blockchain system that can eliminate the need for printed shipping documents and save the freight and logistics industry hundreds of millions of dollars annually, Accenture said.

The consortium tested a method where documents are no longer exchanged physically or digitally, but instead, the relevant data is shared and distributed using blockchain technology under single ownership principles determined by the type of information. Through a detailed review of the current documentation processes, the group examined a re-allocation of information ownership, accountability and risk, enabled by the trust and security blockchain technology offers.

An international shipment of goods for companies in areas such as the automotive, retail or consumer goods industries typically requires more than 20 different documents, many of which are often paper-based, to enable the goods to move from exporter to importer. Across these documents, up to 70 per cent of the data can be replicated. The document-heavy approach limits data quality and real-time visibility to all parties involved in the trade, and this can also delay the financial settlement on goods.

The method can speed up the entire flow of transport documents, reduce the requirement for data entry by up to 80 per cent, simplify data amendments across the shipping process, streamline the checks required for cargo and reduce the burden and risk of penalties for customs compliance levied on customers.

Why blockchain?

Blockchain is a new type of distributed database system that maintains and records data in a way that allows multiple stakeholders to confidently and securely share access to the same information. The technology is poised to revolutionise operations across a multitude of sectors, such as financial services, government, healthcare, entertainment, and freight and logistics

“Our trials have proven the viability of a shipping process in which many documents can be replaced by secure and distributed data sharing with clear and defined ownership,” said Adriana Diener-Veinott, who leads Accenture’s Freight & Logistics industry practice. “This gives companies a significant opportunity to save time and money, whilst improving their service to customers.”

The consortium, which represents typical stakeholders across an international shipment, collaborated to test 12 real shipments, with various destinations, each with different regulatory requirements. The tests confirmed that blockchain can reduce operating costs and increase supply chain visibility.

Each organisation involved in the trials typified a particular stakeholder in the shipping process: AB InBev represented a typical exporter; APL contributed its role as a shipping organisation; Kuehne + Nagel provided direction on the requirements for a freight forwarder, and a European customs organisation replicated the regulatory requirements that cargo faces. Accenture provided the technological and consulting expertise on the blockchain technology and developed the technical architecture required to support a blockchain method, leveraging the capabilities of its Singapore ‘Internet of Things’ practice to rapidly build the prototype.

“APL sees much potential in blockchain technology to accelerate the digital transformation of the container shipping industry, moving us from traditional paper-based transactions to more efficient, more secure and faster processes along the entire supply chain,” said Eddie Ng, head of Strategic Liner Management at APL. “We are therefore happy to be part of the exciting journey to explore how disruptive technology like blockchain can benefit our industry, and ultimately our shippers and their customers.”

Chief information officer of Kuehne + Nagel International AG Martin Kolbe said: “Blockchain is one of the most promising technologies in logistics. It has the potential to digitalise many of today’s paper-based processes and overcome the multitude of different interfaces. From our perspective, the open and collaborative approach applied in this project is key to gaining traction in the industry and the required market acceptance.”

“We continually evaluate new technologies and innovations to enhance our operations to meet consumer needs and deliver the freshest beer,” said Danillo Figueiredo, VP of International Logistics, AB InBev. “Blockchain technology will be transformational to our business and the world. It reduces mistakes, digitises information and improves the supply chain process, so we can focus on our core business of brewing the best beers for consumers.”